Best Buy reports strong Q2, ups outlook as position is ‘fundamentally stronger’ | ZDNet

Best Buy reported a better-than-expected second quarter, raised its outlook for the fiscal year and said it is a fundamentally better position now that demand is strong in its online and brick-and-mortar stores.

The company’s results rhyme with other retailers that have upped their digital transformation game. Retailers ranging from Walmart to Target to Home Depot and Lowe’s have all reported strong results. Foot traffic in physical stores have increased as digital channels post growth even against tough comparisons from a year ago when most sales were online.

Best Buy reported fiscal second quarter earnings of $2.90 a share and $2.98 a share non-GAAP. Revenue for the second quarter was $11.85 billion, up from $9.9 billion a year ago. Wall Street was expecting second quarter non-GAAP earnings of $1.85 a share on revenue of $11.49 billion.

CEO Corie Barry acknowledged that Best Buy was lapping an unusual COVID-19 pandemic quarter, but sales were up 24% from the fiscal 2020 second quarter as operating income more than doubled. Barry said demand for technology was strong. She said:

Over the longer term, we are fundamentally in a stronger position than we expected just two years ago. There has been a dramatic and structural increase in the need for technology. We now serve a much larger install base of consumer electronics with customers who have an elevated appetite to upgrade due to constant technology innovation and needs that reflect permanent life changes, like hybrid work and streaming entertainment content.

Best Buy raised its outlook and now expects fiscal 2022 revenue to be between $51 billion and $52 billion with same store sales growth of 9% to 11%. Best Buy was projecting same store sales growth of 3% to 6% for fiscal 2022.

For the third quarter, Best Buy is projecting revenue of $11.4 billion to $11.6 billion with same store sales to fall 1% to 3%.

By category, Best Buy saw strong growth across its product lines. The company said 43% of its revenue was from computing and mobile phones with 31% from consumer electronics. Services same store sales growth for the second quarter was 23.6% with consumer electronics up 27.4%. Computing and mobile phone same store sales were up 11.4% ahead of product launches from Samsung and Apple.